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The 60% effective tax rate is only on earnings between 100k and 125k, and only because of the loss of certain tax benefits. After 125k it drops back to 40%. It'
by verbify 6y ago
The 60% effective tax rate is only on earnings between 100k and 125k, and only because of the loss of certain tax benefits. After 125k it drops back to 40%. It's really silly that it exists, but isn't representative of UK tax rates, it is just a weird side effect of the loss of the personal allowance.
And I reckon most earning between 100k and 125k would avoid that 60% by contributing to their pension, so I don't think many are affected by it.
- lotsofpulp 6y agoThat’s the same kind of nuance which makes the linked article’s claim of 1% tax paid a non story (at least in the context of talking about Netflix specifically).
- varispeed 6y agoIf you make £60k before tax, your effective rate is still about 40% (if you add employer's NI which does not appear on payslips). Then you also have to add local taxes like council tax etc. It's not looking good. From tomorrow we are also going to get this - https://norightsemployee.uk/faq https://norightsemployee.uk/faq - workers on such contracts will have to factor employer's NI and apprenticeship levy in their rates.
- drdec 6y agoSurely you mean marginal tax rates and not effective rates? Or is it true that at 124K you pay ~74K but at 126K you pay less, ~50K?
- verbify 6y agoSorry, you're right I meant marginal.
- deleted 6y ago[deleted]